Category: Stock Research

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Shares of Block lower on short seller report!

Block intends to explore legal action against Hindenburg Research

#Hindenburg Research has published a short report on Block (SQ), formerly known as Square, stating that the firm’s “2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping.

The “magic” behind Block’s business has not been disruptive innovation, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics.”

The firm, which discloses that it has taken a short position in shares of Block, contends that the company “has misled investors on key metrics, and embraced predatory offerings and compliance worst-practices in order to fuel growth and profit from facilitation of fraud against consumers and the government.”

In addition, it believes “Jack Dorsey has built an empire-and amassed a $5 billion personal fortune-professing to care deeply about the demographics he is taking advantage of. With Dorsey and top executives already having sold over $1 billion in equity on Block’s meteoric pandemic run higher, they have ensured they will be fine, regardless of the outcome for everyone else.”

Block Responds

Block said in a statement: “We intend to work with the SEC and explore legal action against #Hindenburg Research for the factually inaccurate and misleading report they shared about our Cash App business today.

Hindenburg is known for these types of attacks, which are designed solely to allow short sellers to profit from a declined stock price. We have reviewed the full report in the context of our own data and believe it’s designed to deceive and confuse investors. We are a highly regulated public company with regular disclosures, and are confident in our products, reporting, compliance programs, and controls. We will not be distracted by typical short seller tactics.”

Robert Baird

Baird analyst David #Koning comments on a short report that is significantly weighing on Block shares in pre-market trading, noting that the report implies that the company’s CashApp is reasonably easy, or relatively easier than other banking services, for criminals to use and claims that CashApp is somewhat complicit in allowing this type of behavior.

However, the firm believes Block helps many underbanked access the financial markets and “like any organization probably has some clients that are criminals.” The firm views the stock as good value, but is concerned with the prevalence of any criminal activity and how this could impact investor sentiment, estimating that “in a pretty dire case” shedding 20% of accounts could impact about 8% of total gross profit. Baird has an Outperform rating and $92 price target on Block shares, which are down about 20% to $58.07 in early trading following Hindenburg Research’s short report.

KeyBanc

KeyBanc analyst Josh #Beck sees “no merit to the disparaging claims” made against Block by a “smaller outfit” that published a short report and rather views the report as “observations from a relatively novice industry outsider who is not familiar with standard operating practices and principles within the FinTech industry.”

The firm, which said Block is subject to numerous laws and regulations as a financial services provider, believes Block “fully complies with applicable regulations and laws and prevents the maximal amount of fraud possible within a business that is inherently subject to, while not immune to, any instances of fraud.” KeyBanc has an Overweight rating and $100 price target on Block shares, 

Mizuho

Mizuho analyst Dan #Dolev says Hindenburg Research’s short report “makes valid arguments,” such as the slowdown in inflows and sustainability of the instant deposit fees.

While this might increase regulatory scrutiny, other claims and risks around high, unregulated interchange fees and definition of monthly users are well known to investors, the analyst tells investors in a research note. The firm says other aspects of the report, like adding back stock based compensation after Block publicly shifted focus to include non-cash expenses in operating income, “may hold less water.”

Mizuho says the near-term bull case on Blok remains reaching better than expected profits helped by cost control. The long-term bull case remains creating a “unique” closed-loop payments network by connecting merchants and consumers, the firm adds. It has a Buy rating on the stock with a $93 price target.

Raymond James

Raymond James contends that this morning’s short report on Block issued by Hindenburg Research doesn’t include a lot of “new” news or a “bombshell” and argues that the biggest risk is potentially drawing scrutiny from regulators and politicians, which could create an overhang on the stock.

However, given the situation concerning SVB Financial (SIVB) and the current banking fallout, the firm would guess “this is way down the list of priorities” for financial regulators at this time.

The firm, which adds that “while being accused of overstating users certainly isn’t positive,” notes that there are no accusations of fraudulent accounting and the “revenue is real.” Raymond James has a Market Perform rating on Block shares.

RBC Capital

RBC Capital analyst Daniel Perlin made no change to the firm’s Outperform rating or $95 price target on shares of Block. The firm says the short report that was released today focuses on Block’s “underbanked” user base, as being a series of bad actors, enabling the overstatement of its users metrics, as well as BNPL via its acquisition of Afterpay, systematically embracing predatory pricing, the analyst tells investors in a research note.

RBC Capital’s view of the stock is unchanged, but thinks the negative overhang can persist for some time.

Shares of Block are down 20% to $58.10.

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Stockwinners Portfolio returns 22.8% in 2022

S&P 500 declined 19.6% during the same period

The bear market of 2022 cost most investors dearly whereas Stockwinners readers were able to register double digit returns. Our experience in the past 24 years has taught us how to avoid pitfall of following crowds and Wall Street gurus. In fact, we stayed away from story stocks such Tesla (TSLA), Paypal Holdings (PYPL) and Meta Platform (META). We concentrated on small to medium cap stocks. These stocks typically do not have any exposure to overseas markets and are traded on their own fundamentals.

Russian invasion of Ukraine created unique trading opportunities for investors. The vicious invasion of Ukraine caused energy and commodity prices skyrocket thus offering opportunities in that space. In fact, one of our better performers on the year was EPAM System (EPAM). This software company has about 25 percent of its workforce located in the eastern European country. Those who bought the stock based on our recommendations were rewarded with a 23% return in two days.

Energy stocks were awakened with the invasion. Crude oil shot up to $106.50 from $70 per barrel. This price increase buoyed energy stocks. Amongst our better performers were shares of Par Pacific Holdings (PARR). The refiner shares gained fifteen percent following our recommendations.

Other commodity stocks that were featured in our portfolio included those involved in precious and rare minerals mining. Livent Corporation (LTHM) was one such name. The lithium miner was featured several times with solid returns. The returns were 14%, 12% and 18%. Sigma Lithium Corporation (SGML) was another name in the sector. It gained 14% following our recommendations.

Sierra Wireless, Inc. (SWIR) was another stock that came to our attention. The company provides device-to-cloud Internet of Things (IoT) solutions. Shares were featured in August with success. Stock gained 18 percents in two weeks.

We featured put options (shorting the stock) on several names. One of the names featured was Open Text Corporation (OTEX). Put option on the name returned 325% in 17 days. The put was featured at $1.50 and it was closed 17 days later at $6.40. Another name that was featured several times was Carvana (CVNA). Shares of the used car retailer have fallen from $300 to $3.55.

A strong employment market created opportunity in placement companies. Cross Country Healthcare, Inc. (CCRN) was such name. The company places medical staff. Shares were featured in August and gained 18% in less than two weeks.

Our portfolio can be downloaded here. Additionally, one may download our selections for the past 18 years in a spreadsheet format.

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ForgeRock sold for $2.3 billion

ForgeRock to be acquired by Thoma Bravo for $23.25 per share in cash

ForgeRock announced that it has entered into a definitive agreement to be acquired by Thoma Bravo for $23.25 per share, in an all-cash transaction valued at approximately $2.3B.

The offer represents a premium of approximately 53% over ForgeRock’s closing share price on October 10, the last full trading day prior to the transaction announcement, and a premium of approximately 44% over the volume weighted average price of ForgeRock stock for the 30 days ending October 10.

The transaction, which was unanimously approved by the ForgeRock board of directors, is currently expected to close in the first half of 2023, subject to customary closing conditions, including approval by ForgeRock’s shareholders and the receipt of required regulatory approvals.

ForgeRock, Inc. operates a digital identity platform to secure, manage, and govern the identities of customers, employees, partners, application programing interfaces (APIs), microservices, devices, and the Internet of things worldwide. It offers identity management products to automate onboarding/registration and progressive profiling, identity lifecycle and relationship management, identity provisioning and synchronization, user self-service, personalization, delegation, and privacy and consent management. 

Upon completion of the transaction, ForgeRock’s common stock will no longer be publicly listed and ForgeRock will become a privately held company.

FORG is up $7.38 to $22.53.

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Hasbro questioned by shareholder!

Alta Fox urges Hasbro to address questions on Q1 earnings call

Alta Fox Capital Management, the beneficial owner of approximately 2.5% of the outstanding shares of Hasbro (HAS), urged the Company to address the following questions when it reports Q1 financial results tomorrow:

“Why has the Company pushed back the record date for the 2022 Annual Meeting of Shareholders?

Given that the Board of Directors appears to be more focused on entrenchment than value creation, we are forced to question the motivation behind moving the record date to May 9th.

We fear the Board is hoping that the delay will provide time to court friendly shareholders, who are likely to support the incumbents.

In our view, this seemingly self-serving maneuver has parallels to the defensive PIPE transactions recently initiated by other underperforming companies facing election contests.

Why is the Company forcing a costly election contest instead of accepting a modest Board refresh and a capital allocation review committee in response to shareholders’ concerns regarding Hasbro’s chronic underperformance?

In our view, investors have reason to question whether the Board is acting in shareholders’ best interest or engaging in further entrenchment to maintain the Hassenfeld family’s influence.

Why did the Company expand its Board to 13 members instead of carrying out a viable director refresh?

We contend the decision to expand the Board from 11 members to 13 members following our nomination reflects an unacceptable level of dysfunction and entrenchment in the boardroom.

Why did the Company feel it was appropriate for Cynthia W. Williams, the newly appointed President of Wizards of the Coast, to join another public company’s board within two months of being appointed to her new role?

We question why Williams would want to join the board of Aterian, a company whose stock is down almost 70% from its IPO in 2019 and which has been accused of serious wrongdoings.

We find it surprising that Hasbro’s Board allowed Ms. Williams to dilute her attention so early in her tenure at Wizards of the Coast and was comfortable associating Hasbro’s senior leadership with Aterian.

Cynthia W. Williams

How did the Board determine so quickly that a spin-off of Wizards of the Coast was ill-advised, and why will it not share this analysis with shareholders?

We believe spinning off Wizards of the Coast could help enhance Hasbro’s corporate structure and unlock the full value of the division, which has a completely different growth, margin and valuation profile than the Consumer Products and Entertainment segments.

In light of the Board’s apparent credibility issues, we find it hard to believe the Company comprehensively and objectively evaluated strategic alternatives for the unit.

We believe shareholders deserve a detailed explanation of the Board’s purported evaluation, and that the analysis should be re-examined with shareholder-appointed directors focused on creating shareholder value rather than preserving the Hassenfeld family legacy.

To date, the Company has provided little evidence of business unit “synergies” that could not be accomplished through a partnership arrangement.

Why is the Board resistant to forming a capital allocation committee when investments, such as the Entertainment One deal, have been value destructive?

It is confounding to us that Hasbro continues to assume no accountability for poor capital allocation when organic and inorganic investments have failed to produce meaningful shareholder value over many years.”

Alta Fox has filed a preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with its nomination of five candidates for election to the Company’s Board at this year’s Annual Meeting.

Hasbro reports on April 19th before the market open. HAS is down 2% to $83.47.

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Frontier buys Spirit Airlines

Frontier, Spirit to combine in deal that implies $25.83 per Spirit share

Spirit Airlines (SAVE) and Frontier Group Holdings (ULCC) announced a definitive merger agreement under which the companies will combine, creating America’s most competitive ultra-low fare airline.

Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Spirit equity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own.

This implies a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on February 4, 2022, representing a premium of 19% over the February 4, 2022, closing price of Spirit, and a 26% premium based on the 30 trading-day volume-weighted average prices of Frontier and Spirit.

The transaction values Spirit at a fully diluted equity value of $2.9B, and a transaction value of $6.6B when accounting for the assumption of net debt and operating lease liabilities.

Upon closing of the transaction, existing Frontier equity holders will own approximately 51.5% and existing Spirit equity holders will own approximately 48.5% of the combined airline, on a fully diluted basis, providing both Frontier and Spirit equity holders with substantial upside potential.

Spirit Route Map

The Board of Directors for the new airline will be comprised of 12 directors (including the CEO), seven of whom will be named by Frontier and five of whom will be named by Spirit.

Bill Franke, CEO of the Indigo Partners, will be Chairman of the Board of the combined company.

Frontier Route Map

The merger is expected to close in the second half of 2022, subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders.

Frontier’s controlling stockholder has approved the transaction and related issuance of shares of Frontier common stock upon signing of the merger agreement.

The combined company’s management team, branding and headquarters will be determined by a committee led by Franke prior to close.

Separately, Spirit reported Q4 revenue $987.56M, consensus $963.15M.

“Our fourth quarter 2021 results came in better-than-expected, despite the negative impact from Omicron-related flight disruptions, primarily due to very strong demand over the peak December holiday period. I want to thank the entire Spirit team for their professionalism and commitment to providing excellent service to our Guests,” said Ted Christie, Spirit’s president and CEO.

Ted Christie, Spirit’s president and CEO

Spirit Airlines is up 15.9%, or $3.46 to $25.20. Frontier Group is up 14 cents to $12.81.

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AbbVie’s antidepressant achieves positive results

AbbVie’s cariprazine met primary endpoint in Phase 3 study

AbbVie (ABBV) announced top-line results from two Phase 3 clinical trials, Study 3111-301-001 and Study 3111-302-001, evaluating the efficacy and safety of cariprazine as an adjunctive treatment for patients with major depressive disorder.

Cariprazine, sold under the brand names Vraylar in the United States and Reagila in the European Union, is an atypical antipsychotic which is used in the treatment of schizophrenia, bipolar mania, and bipolar depression.

Drug pipeline looks very promising for Abbvie

In Study 3111-301-001, cariprazine showed a statistically significant change from baseline to week six in the Montgomery-Asberg Depression Rating Scale total score compared with placebo.

The Montgomery–Asberg Depression Rating Scale (MADRS) is a ten-item diagnostic questionnaire which psychiatrists use to measure the severity of depressive episodes in patients with mood disorders. 

Patients treated with cariprazine at 1.5 mg/day achieved improved MADRS total score at week six compared to placebo.

Patients treated with cariprazine at 3.0 mg/day demonstrated improvement in MADRS total score at week six over placebo but did not meet statistical significance.

In Study 3111-302-001, cariprazine demonstrated numerical improvement in depressive symptoms from baseline to week six in MADRS total score compared with placebo but did not meet its primary endpoint for either the 1.5 mg/day or 3.0 mg/day dose.

In a previously published Phase 2/3 registration-enabling study, RGH-MD-75, patients treated with cariprazine flexible doses of 2.0-4.5 mg/day in addition to ongoing antidepressant therapy met the primary endpoint and achieved improved MADRS total scores at week eight compared to placebo.

Based on the positive results of studies 3111-301-001 and RGH-MD-75, and the totality of data reported, AbbVie intends to submit a supplemental New Drug Application with the U.S. FDA for the expanded use of cariprazine for the adjunctive treatment of MDD.

Separately, AbbVie reported Q3 Global Humira sales of $5.425B up 5.6% on reported basis.

In Q3, Global net revenues from the immunology portfolio were $6.674 billion, an increase of 15.3 percent on a reported basis, or 14.9 percent on an operational basis.

Global Humira net revenues of $5.425 billion increased 5.6 percent on a reported basis, or 5.2 percent on an operational basis.

U.S. Humira net revenues were $4.613 billion, an increase of 10.1 percent.

Internationally, Humira net revenues were $812 million, a decrease of 14.6 percent on a reported basis, or 16.7 percent on an operational basis, due to biosimilar competition.

Treatment for Psoriasis

Global Skyrizi net revenues were $796 million. Global Rinvoq net revenues were $453 million.

Treatment for moderate to severe rheumatoid arthritis

ABBV is up $5 to $114.70.

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Flying Prescriptions Are Coming!

Walgreens to deploy Wing drone deliveries in Dallas-Fort Worth area

In a blog post by Alphabet’s (GOOG, GOOGL) Wing, the company said, ” Today we’re unveiling a new model for drone delivery that will allow us to expand into densely-populated metropolitan areas in the United States.

Wing will stage delivery drones at retail locations; ready to fly directly to customers.

The aircraft will arrive in small containers that serve as tiny hangars, allowing each store to quickly and easily deploy a small, dedicated fleet from its parking lot, on its roof, or in small spaces adjacent to the building.

When this model launches, Walgreens (WBA) will be the first U.S. retailer to use this new approach.

Walgreens team members will process orders and load packages onto the delivery drones, and Wing will oversee operation of the delivery service.

Our first lightweight, co-located operation will be set up at a Dallas-Fort Worth area Walgreens store in its parking lot, serving parts of the city of Frisco and town of Little Elm.

In addition to the Walgreens store, Wing has teamed up with Hillwood to prepare a separate drone delivery facility within Frisco Station, an urban, mixed-used development located in Frisco.

Hillwood has a long track record supporting forward-thinking, innovative transportation initiatives across the region, most notably at its Alliance Texas development and its designated Mobility Innovation Zone.

We look forward to working with Hillwood as we deploy a facility at Frisco Station that has all the usual delivery capabilities, but will be dedicated to exploring new use cases, community demonstrations, school field trips and public tours…

In preparation for this launch, we’ve been conducting test flights since June at Hillwood’s AllianceTexas Flight Test Center, a drone testing facility in Fort Worth.

We’ll begin a small number of practice flights next week in Frisco and Little Elm, and hope to set up delivery demonstrations to get feedback from the community in the coming weeks.

In the coming months, we expect to launch a commercial service there that would be the first of its kind in a major U.S. metro.”

Google Wing delivers a package

Wing is a subsidiary of Alphabet Inc. that develops technology of drone-based delivery of freight. The company completed their first real-world deliveries in 2014. The company has operations in Australia, the United States, and Finland. 

In July 2018, Project Wing graduated from Google X to become an independent Alphabet company. As of January 2019, Wing began delivering take-out food and beverages out of its test facility in Bonython, Australia as part of a pilot program. In April 2019 Wing became the first drone delivery company to receive an Air operator’s certificate from the Federal Aviation Administration to allow it to operate as an airline in the USA.

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FDA Approved Vapes are coming!

FDA announces ‘first authorization’ for marketing of e-cigarette products

The U.S. Food and Drug Administration announced it has authorized the marketing of three new tobacco products, which it noted marks “the first set of electronic nicotine delivery system products ever to be authorized by the FDA through the Premarket Tobacco Product Application – PMTA – pathway.”

The FDA issued marketing granted orders to R.J. Reynolds Vapor Company, a subsidiary of British American Tobacco, for its Vuse Solo closed ENDS device and accompanying tobacco-flavored e-liquid pods, specifically, Vuse Solo Power Unit, Vuse Replacement Cartridge Original 4.8% G1, and Vuse Replacement Cartridge Original 4.8% G2.

“As the RJR Vapor Company submitted data to the FDA that demonstrated that marketing of these products is appropriate for the protection of public health, today’s authorization allows these products to be legally sold in the U.S.,” the FDA stated.

Solar Powered Vuse

Today, the FDA also issued 10 marketing denial orders for flavored ENDS products submitted under the Vuse Solo brand by RJR.

“Due to potential confidential commercial information issues, the FDA is not publicly disclosing the specific flavored products. These products subject to an MDO for a premarket application may not be introduced or delivered for introduction into interstate commerce. Should any of them already be on the market, they must be removed from the market or risk enforcement. Retailers should contact RJR with any questions about products in their inventory.

The agency is still evaluating the company’s application for menthol-flavored products under the Vuse Solo brand,” the FDA stated.

“Today’s authorizations are an important step toward ensuring all new tobacco products undergo the FDA’s robust, scientific premarket evaluation. The manufacturer’s data demonstrates its tobacco-flavored products could benefit addicted adult smokers who switch to these products – either completely or with a significant reduction in cigarette consumption – by reducing their exposure to harmful chemicals. We must remain vigilant with this authorization and we will monitor the marketing of the products, including whether the company fails to comply with any regulatory requirements or if credible evidence emerges of significant use by individuals who did not previously use a tobacco product, including youth. We will take action as appropriate, including withdrawing the authorization,” said Mitch Zeller, J.D., director of the FDA’s Center for Tobacco Products.

Mitch Zeller, J.D., director of the FDA’s Center for Tobacco Products

Shares to watch: BTI, MO, PM.

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Spectrum Brands shares soar on sale of it’s division

Spectrum Brands agrees to sell Hardware & Home Improvement segment for $4.3B

Spectrum Brands Holdings (SPB) announced it has entered into a definitive agreement to sell its HHI segment to ASSA ABLOY (ASAZY) for $4.3B in cash, which it said represents over 14 times HHI’s expected FY21 Adjusted EBITDA.

Upon closing of the transaction, Spectrum Brands expects to receive approximately $3.5B in net proceeds, subject to final tax calculations and purchase price adjustments.

Spectrum Brands expects to use the proceeds from this transaction to repay debt and reduce its gross leverage ratio to approximately 2.5x times in the near term.

Excess proceeds are expected to be allocated to invest for organic growth, fund complementary acquisitions and return capital to shareholders.

The company expects to maintain its quarterly cash dividend of 42c per common share, which will be subject to the company’s continued review from time to time.

The sale of HHI is expected to close following the receipt of certain regulatory approvals and customary closing conditions.

The results of operations of HHI will be reported as discontinued operations beginning in the fourth quarter of 2021. David Maura, CEO of Spectrum Brands, said, “I am exceedingly proud of the fact that our Hardware & Home Improvement business nearly doubled its EBITDA under Spectrum Brands’ ownership.

I am pleased to know that HHI has found a new home with a great partner, and I am confident that ASSA ABLOY will take it to its highest potential, bringing great value and innovation to consumers for generations to come.

We believe this transaction demonstrates the tremendous value of Spectrum Brands as an owner and steward of our businesses and places the Company in a strong position for the future by allowing us to further reduce our leverage levels, and enhance our capital allocation strategy.

Our remaining business will be more focused, allowing us to prioritize innovation to accelerate organic growth and pursue synergistic acquisitions to further drive value creation in Global Pet Care and Home & Garden, while continuing to look for strategic and organic ways to enhance the value of Home and Personal Care.

After the closing, we will become a more pure play consumer staples company with higher growth rates and strong margins.”

The company added: “Spectrum Brands will be a simplified business consisting of three focused business units with leading market share, strong growth opportunities and consistent performance.

The pro forma business generated $3.0B in net sales and $386 million in Adjusted EBITDA representing a 13.0% margin for the LTM period ended July 4, 2021.

Spectrum Brands will report its fourth quarter 2021 results in mid-November and expects to provide Fiscal 2022 Earnings Framework at that time.”

ASSA ABLOY AB is a Swedish company that provides door opening products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, Africa, North and South America, Asia, and Oceania.  In addition, the company offers entrance automation products, services, and components, such as automatic swing, sliding, and revolving doors; industrial doors; garage doors; high-performance doors; docking solutions; hangar doors; gate automation products; components for overhead sectional doors and sensors; and high security fencings and gates. The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands.

Spectrum’s Hardware & Home Improvement segment offers hardware products under the National Hardware and FANAL brands; locksets and door hardware under the Kwikset, Weiser, Baldwin, EZSET, and Tell Manufacturing brands; and plumbing products under the Pfister brand. Its Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington and LumaBella brands.

The company’s Global Pet Care segment provides rawhide chewing, dog and cat clean-up and food, training, health and grooming, small animal food and care, and rawhide-free products under the 8IN1 (8-in-1), Dingo, Nature’s Miracle, Wild Harvest, Littermaid, Jungle, Excel, FURminator, IAMS, Eukanuba, Healthy-Hide, DreamBone, SmartBones, ProSense, Perfect Coat, eCOTRITION, Birdola, and Digest-eeze brands.

ASAZY is down 38 cents to $15.53 per share while SPB is up $15 to $94.

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ECB sets a two percent target for inflation

ECB keeps key interest rates unchanged, revises forward guidance on rates

The ECB said: “In its recent strategy review, the Governing Council agreed a symmetric inflation target of two per cent over the medium term.

The key ECB interest rates have been close to their lower bound for some time and the medium-term outlook for inflation is still well below the Governing Council’s target.

In these conditions, the Governing Council today revised its forward guidance on interest rates. It did so to underline its commitment to maintain a persistently accommodative monetary policy stance to meet its inflation target.

In support of its symmetric two per cent inflation target and in line with its monetary policy strategy, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realized progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilizing at two per cent over the medium term.

This may also imply a transitory period in which inflation is moderately above target.

Having confirmed its June assessment of financing conditions and the inflation outlook, the Governing Council continues to expect purchases under the pandemic emergency purchase program – PEPP – over the current quarter to be conducted at a significantly higher pace than during the first months of the year…

The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.”

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FDA Approves J&J’s one shot Covid-19 Vaccine

Johnson & Johnson Covid vaccine granted emergency approval from FDA 

The Food and Drug Administration issued an emergency use authorization for the third vaccine for the prevention of coronavirus disease. The FDA has determined that the Janssen COVID-19 Vaccine has met the statutory criteria for issuance of an EUA. The totality of the available data “provides clear evidence that the Janssen COVID-19 Vaccine may be effective in preventing COVID-19,” the agency said in a statement.

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The Janssen COVID-19 Vaccine is manufactured using a specific type of virus called adenovirus type 26. The vaccine uses Ad26 to deliver a piece of the DNA, or genetic material, that is used to make the distinctive “spike” protein of the SARS-CoV-2 virus, the FDA said. While adenoviruses are a group of viruses that are relatively common, Ad26, which can cause cold symptoms and pink eye, has been modified for the vaccine so that it cannot replicate in the human body to cause illness, it added. After a person receives this vaccine, the body can temporarily make the spike protein, which does not cause disease, but triggers the immune system to learn to react defensively, producing an immune response against SARS-CoV-2.

The EUA allows Johnson & Johnson’s (JNJ) Janssen COVID-19 vaccine to be distributed in the U.S for use in individuals 18 years of age and older.

Meanwhile, Johnson & Johnson also announced that the U.S. Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices has recommended its single-shot COVID-19 vaccine.

The ACIP recommendation will be forwarded to the Director of the CDC and the U.S. Department of Health and Human Services for review and adoption.

Johnson & Johnson has begun shipping its COVID-19 vaccine and expects to deliver enough single-shot vaccines by the end of March to enable the full vaccination of more than 20M people in the U.S.

The company plans to deliver 100M single-shot vaccines to the U.S. during the first half of 2021. The U.S. government will manage allocation and distribution of the vaccine in the U.S.

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Johnson & Johnson files for FDA approval of it’s Covid-19 Vaccine

 J&J submits FDA application for emergency use authorization for COVID-19 vaccine

Johnson & Johnson (JNJ) announced that Janssen Biotech, Inc., has submitted an application to the U.S. Food and Drug Administration requesting Emergency Use Authorization for its investigational single-dose Janssen COVID-19 vaccine candidate.

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JNJ files for approval of Covid-19 vaccine

The company’s EUA submission is based on topline efficacy and safety data from the Phase 3 ENSEMBLE clinical trial, demonstrating that the investigational single-dose vaccine met all primary and key secondary endpoints.

The Company expects to have product available to ship immediately following authorization. “Today’s submission for Emergency Use Authorization of our investigational single-shot COVID-19 vaccine is a pivotal step toward reducing the burden of disease for people globally and putting an end to the pandemic,” said Paul Stoffels, M.D., Vice Chairman of the Executive Committee and Chief Scientific Officer at Johnson & Johnson.

“Upon authorization of our investigational COVID-19 vaccine for emergency use, we are ready to begin shipping. With our submission to the FDA and our ongoing reviews with other health authorities around the world, we are working with great urgency to make our investigational vaccine available to the public as quickly as possible.”

Johnson & Johnson intends to distribute vaccine to the U.S. government immediately following authorization, and expects to supply 100 million doses to the U.S. in the first half of 2021.

JNJ last traded at $161.99.

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Waddell & Reed sold for $1.7 billion

Macquarie to acquire Waddell & Reed for $25 per share

Waddell & Reed (WDR) announced it has entered into a merger agreement with Macquarie Asset Management, the asset management division of Macquarie Group (MQBKY), under which Macquarie would acquire all of the outstanding shares of Waddell & Reed for $25.00 per share in cash representing total consideration of $1.7B.

The transaction represents a premium of approximately 48% to the closing price of Waddell & Reed common stock on December 1, 2020, the last trading day prior to the transaction announcement, and a premium of approximately 57% to Waddell & Reed’s volume-weighted average price for the last 90 trading days.

On completion of the transaction, Macquarie has agreed to sell Waddell & Reed Financial, Inc.’s wealth management platform to LPL Financial Holdings Inc. (LPLA), a U.S. retail investment advisory firm, independent broker-dealer, and registered investment advisor custodian, and also enter into a long-term partnership with Macquarie becoming one of LPL’s top tier strategic asset management partners.

As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over $465B, with the combined business becoming a top 25 actively managed, long-term, open-ended U.S. mutual fund manager by assets under management, with the scale and diversification to competitively position the business to maintain and extend its high standards of service to clients and partners.

The transaction has been approved by the Boards of Directors of Waddell & Reed Financial, Inc., Macquarie Group and LPL and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed Financial, Inc. stockholder approval and other customary closing conditions.

Waddell & Reed Financial, Inc. provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. 

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Xilinx sold for $35 billion

Xilinx to be acquired by AMD for $35B in all-stock transaction

AMD (AMD) and Xilinx (XLNX) announced they have entered into a definitive agreement for AMD to acquire Xilinx in an all-stock transaction valued at $35B.

Under the terms of the agreement, Xilinx stockholders will receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction.

Xilinx makes programmable logic devices

Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock. Post-closing, current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis, while Xilinx stockholders will own approximately 26%.

The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

AMD expects to achieve operational efficiencies of approximately $300 million within 18 months of closing the transaction, primarily based on synergies in costs of goods sold, shared infrastructure and through streamlining common areas.

AMD goes shopping taking advantage of Intel’s troubles

The transaction has been unanimously approved by the AMD and Xilinx Boards of Directors.

The acquisition is subject to approval by AMD and Xilinx shareholders, certain regulatory approvals and other customary closing conditions.

The transaction is currently expected to close by the end of calendar year 2021.

Until close, the parties remain separate, independent companies. Dr. Lisa Su will lead the combined company as CEO. Xilinx President and CEO, Victor Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction.

In addition, at least two Xilinx directors will join the AMD Board of Directors upon closing.

Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. The company offers integrated circuits (ICs) in the form of programmable logic devices (PLDs), such as programmable system on chips, and three dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores. XLNX closed at $114.55.

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Acorn International sold for $21 per share

Acorn International enters merger agreement for going private transaction

Acorn International (ATV) announced that it has entered into a definitive agreement and plan of merger with First Ostia Port, a Cayman Islands exempted company and its wholly owned subsidiary Second Actium Coin, a Cayman Islands exempted company, pursuant to which, the merger sub will merge with and into the company thereby becoming a wholly-owned subsidiary of the controlling shareholder.

Acorn taken private

Acorn International, Inc. develops, promotes, and sells a portfolio of proprietary-branded products in the People’s Republic of China. The company operates through two segments, Direct Sales and Distribution Sales.

The company will be acquired in an all-cash transaction by the controlling shareholder.

Pursuant to the terms of the merger agreement, each ordinary share, par value 1c per share, of the company, including shares represented by American Depositary Shares, each representing twenty shares, issued and outstanding immediately prior to the effective time, other than the excluded shares shall be cancelled in exchange for the right to receive $1.05 in cash per share without interest.

As each ADS represents twenty shares, each ADS issued and outstanding immediately prior to the effective time, other than ADSs representing excluded shares, shall represent the right to receive $21.00 in cash without interest pursuant to the terms and conditions set forth in the merger agreement.

The per share merger consideration represents a premium of 44.1% over the company’s closing price of $14.57 per ADS as quoted on the New York Stock Exchange, or NYSE, on August 17, the last trading day prior to the day when the company received a non-binding “going private” proposal from the controlling shareholder.

The merger consideration also represents an increase of approximately 38.0% over the $15.22 per ADS offered by the controlling shareholder in its revised going-private proposal on August 18 and a premium of approximately 39.4% over the company’s closing price of $15.07 per ADS on October 9, the last trading day prior to issuance of this press release.

The controlling shareholder intends to fund a substantial portion of the consideration for the merger in the form of debt funding from a third-party lender and has delivered to the company duly executed copies of the loan and security agreement.

The board, acting upon the unanimous recommendation of a committee of independent directors established by the board, approved the merger agreement and the merger.

The special committee negotiated the terms of the merger agreement with the assistance of its independent financial and legal advisors.

The merger, which is currently expected to close during the last quarter of 2020, is subject to customary closing conditions, including the approval of the merger agreement by a requisite company vote of shares representing at least two-thirds of the voting power of the shares present and voting in person or by proxy at a meeting of the company’s shareholders which will be convened to consider the approval of the merger agreement and the merger. 

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